Alabama group wants $1.6 bln in bankruptcy case

Michael Connor

(Reuters) – Local politicians in Alabama’s bankrupt Jefferson County are pressing a new $1.6 billion claim on behalf of 130,000 sewer system customers they say were cheated by corrupt county workers and Wall Street creditors.

Working against a U.S. Bankruptcy Court deadline on Monday for claims in Jefferson County’s landmark, $4.23 billion bankruptcy case, Roderick Royal, the president of the Birmingham City Council, and 13 others on Monday filed a claim against creditors of Jefferson County and its sewer system.

The filing argues that the sewer system’s rate payers, including the two-thirds who live in low-income Birmingham, were hurt by Wall Street financing techniques and the corruption of more than 20 office holders and others convicted of crimes.

The filers, who include state representatives and the Jefferson County tax assessor, claim the rate payers had so far paid $1.6 billion unnecessarily because of a “continuing pattern of misconduct and criminal activity by managerial personnel of the county acting in collusion with other wrongdoers, including many of the top 20 creditors.”

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